The first 100 days of the Obama administration have been largely taken up with formulating a response to the immediate economic crisis—and rightly so. If the economy completely collapses, if we go from recession to depression, nothing meaningful can be accomplished over the next four or eight years. So the creation of a stimulus package and a financial-rescue plan has justifiably monopolized the president’s time and that of his chief advisors.
Nevertheless, there’s been a domestic political agenda awaiting action for years, and it needs to be addressed by this president, sooner rather than later. It will take time for the economy to fully recover, perhaps Obama’s entire first term. In the meantime, now that the bleeding has slowed, it’s not too soon to look beyond the immediate emergency and begin working seriously on long-term progressive goals.
The priority list can be pared down to a handful of especially critical objectives that are achievable and to which the president has, at various times, either announced support or given lip service. The first of these, enacting the Employee Free Choice Act (EFCA), which would allow the eminently fair “card-check” system of union organizing, has been unambiguously endorsed by Obama as a means of growing the middle class. Lately, however, White House aides such as Rahm Emanuel have avoided discussing it, treating the proposed legislation rather like a crazy uncle in the attic, whose existence must not be acknowledged. There is reason for this timidity. The EFCA campaign will be nasty; it will draw sharp lines between capital and labor, and between anti-union and pro-union households. Business, especially big business, which many Democrats rely on for election contributions, hates the proposal, and hard-core conservatives concur.
In other words, the administration will have to fight for EFCA, and progressives will have to see that it does. One argument likely to be made against card-check is that the timing is flawed, that a recession is the wrong time for union activism because jobs are scarce and may be further reduced if employers are chased overseas to nonunion venues. That means the Third World—European unions are stronger than those in the US—but outsourcing to Asia and Latin America has been a constant phenomenon in recent years. American business needs no further incentive to move offshore since it’s already doing it.
Moreover, there’s no inherent conflict between hard times and unionization. The worst decade of the 20th century economically, the 1930s, witnessed this country’s greatest strides in labor organizing. Section 7a of FDR’s National Industrial Recovery Act, which legally established collective bargaining in 1933, and the National Labor Relations (or Wagner) Act, which superseded and reinforced it in 1935, prompted a tripling of union membership from three to nine million before the end of the Depression, with commensurate improvements in wages and benefits. EFCA could do the same in our time.
Another progressive reform the president has been advocating since the 2008 primary season is removal of the arbitrary cap on Social Security and Medicare (or FICA) taxes, presently applied only to annual wages under $102,000. Originally, the Obama proposal was to tax all salaried income with no exceptions. Then, in the general election, it was unaccountably refined and narrowed so as not to apply to earnings between $102,000 and $250,000, creating a tax “donut hole” beneficial to a select few. Those earning under $102,000 would continue paying 6% of their salaries to FICA (with their employer adding a matching 6%), while those taking home over $250,000 would be taxed at a rate of between 2 and 4 percent.
Obama’s FICA-tax donut hole makes no sense, economically or morally. Retaining it means only half of Social Security’s projected shortfall over the next 75 years ($4.3 trillion) would be eliminated; removing it would allow repeal of the cap to solve nearly all of the system’s funding problems and disarm those alarmists on the right seeking to cut entitlements. And it would ensure that all recipients pay their fair share. Progressives need to support the president’s cap elimination, but insist that it apply across the board.
A third progressive objective, aimed at fairness and debt reduction, should be general tax reform. In the case of income taxes, this can be accomplished by simply preventing reenactment of the lapsing Bush tax cuts for the rich, which would have the effect of raising the marginal rate on the wealthiest Americans from 35 to 39.6 percent, where it was under Clinton. That’s still too generous to the millionaire-billionaire class, whose tax should at least go to 50%, the rate when Reagan left office. Canada maintains this level of taxation on its wealthy with no adverse consequences; its economy, in fact, is in better shape than ours.
In addition to letting the Bush income-tax cuts lapse, President Obama proposes raising the capital-gains tax from 15 to 20 percent, a good start, but progressives should pressure him to go further toward the 28% rate in effect prior to 1997. During the primaries, John Edwards suggested a 25% rate and Dennis Kucinich called for tying capital gains to regular income and taxing it accordingly. That’s more like it.
A further progressive goal should be to save the Medicare trust fund from bankruptcy by supporting the president’s plan to reduce the billions in unjustified federal subsidies going to health-insurance companies, which allows them to undercut the traditional program with their privatized “Medicare Advantage” plans. Obama wants to merely cut the subsidies; progressives should insist on their total elimination.
Last but certainly not least is the enactment of universal health insurance. The administration currently visualizes reaching universality via a mixed public-private system built on the existing job-based private structure, whereby employers would be mandated to either cover their workers through private insurance or pay into a Medicare-style public program that would take up the slack. Progressives should continue to press for a purely public system of government single-payer insurance, the best option by far, and regard the president’s plan only as a fallback position. The Obama approach allows single-payer a foot in the door, nothing more. We can do better.
The aforementioned list of proposals, far from exhaustive, humbly offers a starting place for building a progressive society. As the poet said, seize the day.
Wayne O’Leary is a writer in Orono, Maine.
From The Progressive Populist, May 15, 2009
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